Who Graduates with Excessive Student Loan Debt?

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Who Graduates with Excessive Student Loan Debt?"

Transcription

1 Student Aid Policy Analysis Papers Who Graduates with Excessive Student Loan Debt? debt/ Mark Kantrowitz President MK Consulting, Inc. December 14, 2015

2 Executive Summary Student loan debt has been growing rapidly over the last decade. But, while milestones may be impressive, what matters more is the growth in excessive student loan debt at graduation. A borrower has excessive student loan debt when the borrower graduates with more debt than he or she can afford to repay in a reasonable amount of time, such as within 10 years of graduation. This paper defines excessive debt as occurring when the borrower s debt service to income ratio the percentage of monthly gross income devoted to repaying student loan debt is 10% or more under a standard 10 year repayment plan. This paper provides a rational justification for using the 10% debt service to income ratio as a cap on affordable student loan debt. It derives the threshold by assuming that part of the after tax increase in income for Bachelor s degree recipients (as compared with high school graduates) is available to repay student loan debt, assuming a 10 year repayment term. The 10% threshold corresponds to using half of the additional net income to repay student loan debt. The paper also derives a 15% debt service to income threshold as a stretch limit by assuming that three quarters of the additional net income is available to repay student loan debt. The 10% and 15% debt service to income thresholds are also consistent with the rule of thumb that total student loan debt at graduation should be less than the borrower s expected annual starting salary. This paper presents several other new results concerning students graduating with excessive student loan debt. The percentage of Bachelor s degree recipients graduating with excessive student loan debt has been growing for the last three decades. But, the percentage of Bachelor s degree recipients graduating with student loan debt who graduate with excessive debt has remained at slightly more than a quarter of Bachelor s degree recipients who graduate with student loan debt for the last two decades. This suggests that the growth in the percentage of Bachelor s degree recipients with excessive debt is driven by the overall growth in the percentage of students who must borrow to pay for college. Students who graduate with excessive student loan debt are more likely to delay major life cycle events, such as buying a home, getting married and having children, than students who graduate with affordable debt. Students who graduate with excessive debt are more likely to take a job outside their field, to work more than desired and to work more than one job. They are also significantly more likely to say that their education debt influenced their employment plans. Students who graduate with excessive debt are just as likely to own a car as students who graduate with affordable debt, but are less likely to have a car payment of $350 or more. Thus, graduating with excessive student loan debt can be the difference between owning a new car and a used car. Students who graduate with excessive debt are less likely to feel that their undergraduate education was worth the financial cost, as of one year after graduation. 1 A borrower has excessive student loan debt when 10% or more of a borrower s gross income must be devoted to repaying the borrower s student loan debt, assuming a 10-year repayment term

3 Growth in Student Loan Debt Rapid growth in the amount of outstanding student loan debt has drawn the attention of news media and the public to the student loan problem. Outstanding student loan debt exceededd credit card debt in 2010, auto loans in 2011 and $1 trillion in 2012, now second only to home mortgage debt. While the growth in outstanding student loan debt is noteworthy, the impact on individual borrowers matters more. This chart, which is based on dataa from the National Postsecondary Student Aid Study (NPSAS), demonstratess the steady growth in the percentage of Bachelor s degree recipients who graduate with student loan debt and the average debt at graduation for those who graduate with debt. Growth in Student Loan Debt at Graduation for Bachelor's Degreee Recipients Average Student Debt % Graduating with Student Loans $60,0000 $50,0000 $40, % 58.4% 60.3% 62.2% 63.2% 64.2% 65.4% 66.5% 67.7% 69.0% 70.2% 70% 59.3% 61.2% 62.7% 63.7% 64.8% 65.9% 67.1% 68.3% 69.6% 70.9% 60% 49.4% % 50% $30,0000 $20,0000 $10,0000 $0 45.5% % 30% 20% 10% 0% But, the growth in debt at graduation is not necessarily a problem, if most borrowers can afford to repay their loans. So, it is important to ask: How many students are graduating with excessivee debt? 2

4 Defining Excessive Debt Student loan debt is excessive when the borrower cannot afford to repay it in full within a reasonable amount of time, such as within 10 years or less after graduation. The standard repayment term for federal student loans is 10 years. Borrowers can reduce their monthly loan payment by choosing a longer repayment term. For example, extended repayment and incomedriven repayment plans can increase the repayment term to 20, 25 or even 30 years. But, increasing the repayment term also increases the total amount paid over the life of the loan. Borrowers who increase the repayment term will still be repaying their own student loans when their children enroll in college. They will be less likely to have saved for their children s college education and they will be less willing to borrow to help them pay for college. Thus, the burden of repaying excessive student loan debt will be severe enough to affect the next generation s ability to pay for college. Determining whether the student loan debt is affordable requires a comparison of debt with income, not debt by itself. Six figure student loan debt might be excessive for a borrower with just a Bachelor s degree in a low paying liberal arts field, but not for a borrower who earns an advanced degree, such as an M.D. in a lucrative specialty like oncology, cardiology or orthopedics. To determine whether the student loan debt is affordable, the monthly loan payment must be compared with monthly income. Many students pursue a college education in order to obtain a better paying job. Accordingly, it is reasonable to require that the incremental increase in net income after taxes from obtaining a college degree should be sufficient to repay the student loan debt. Moreover, one could argue that half of the increase in take home pay should be available for repaying student loans and half for other priorities, so that the college graduate derives an immediate financial benefit from earning a college degree. Table of the 2014 Digest of Education Statistics provides data on the median annual earnings of full time, year round workers age 25 to 34 by educational attainment for selected years from 1995 to This data is based on the U.S. Census Bureau s Current Population Survey (CPS). In 2013, the median annual earnings for full time, year round workers with only a Bachelor s degree in the decade from age 25 to age 34 was $48,530, compared with $30,000 for workers with just a high school diploma or GED. This yields an average $18,530 increase in annual gross income from obtaining a Bachelor s degree. Assuming a 25% federal income tax rate, 7.65% in FICA taxes and up to 9.8% in state and local income taxes, this yields $10,655 after taxes, or 22.0% of gross income. Half of this figure is 11.0%, setting a reasonable limit on the percentage of income available to repay student loan debt. Table P 24 of historical income tables for the Current Population Survey (CPS) 2 provides similar data concerning median earnings by educational attainment for full time, year round workers age 25 and older. 3 However, unlike table , this data is not limited to the decade from age 25 to 34. Nevertheless, this income data yields a similar result, capping the percentage of income reasonably available to repay student loan debt at 11.2% of gross earnings in 2013 and 2014 and around 10.2% in the early 1990s

5 This chart shows limits based on percentages of historical income data derived from Table % 1 Percentage of Income Available to Repay Student Loans, % 10.2% 10.4% 11.0% 9.8% 1 9.4% 9.6% 9.6% 9.6% 9.1% 8.0% 6.0% 4.0% 2.0% As this chart demonstrates, the debt service to income percentage has averaged about 1 for the last two decades. Using a similar approach to base the stretch limit on three quarters of the increase in net income after taxes would yield a percentage of gross income that averages around 15%. Thus, student loan debt at graduation should be considered affordable if the monthly loan payments assuming a 10 year repayment term are less than 10% of gross monthly income. The student loan payments will still be affordable, but more of a financial stretch for the borrower, if the payments are less than 15% of gross monthly income. To set this in context, this table shows a histogram of debt service to income ratios for Bachelor s degree recipients in based on 2009 income, using the 2012 follow up to the Baccalaureate & Beyond longitudinal study (BB12). The mode is at 7% and the median is at 8%. 10 Distribution of Monthly Loan Payment as Percent of Monthly Income % 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 26% 27% 28% 29% 30% 31% 32% 33% 34% 35% 4

6 This table shows the percentage of Bachelor s degree recipients graduating in with excessive student loan debt for various caps on the debt service to income ratio, based on BB12 data. Thus, the 10% threshold corresponds to about a quarter of Bachelor s degree recipients graduating with excessive student loan debt. Cap on Debt Service to Income Ratio Percent of Bachelor s Degree Recipients Graduating with Excessive Debt 5% 49.3% 8% 33.7% 10% 27.2% 15% 16.2% 20% 1 25% 6.6% Note that data for the first year after graduation tends to represent a ceiling on the amount of student loan debt and a floor on the amount of income, since student loan debt tends to decrease and income tends to increase over the borrower s career. So, the debt to income and debt service to income ratios will tend to decrease over time. This definition of excessive debt in terms of the debt service to income ratio represents a more direct measure of whether students are graduating with affordable student loan debt than the cohort default rate (CDR). The cohort default rate measures the percentage of students entering repayment during one federal fiscal year who default by the end of a subsequent federal fiscal year. Defaulting on a student loan is a potential consequence of excessive debt, but not the only possible consequence. Also, some borrowers default on their student loans for reasons other than affordability of the debt. So, the cohort default rate is, at best, an indirect measure of whether students are graduating with affordable student loan debt. The CDR does not measure other non paying statuses, such as deferments, forbearances and delinquencies. Moreover, borrowers who graduate with excessive debt might reduce the debt serviceto income ratio by choosing alternate repayment plans that stretch out the repayment term instead of defaulting. Also, the cohort default rate is prone to manipulation by colleges that encourage borrowers to apply for deferments and forbearances, pushing the default outside the measurement window. The derivation of a 10% to 15% cap on the debt service to income ratio is also more rational than the flawed reasoning used to justify an 8% cap on the debt service to income ratio in the 2014 gainful employment regulations. 4 The regulations selectively cited papers that based an 8% cap on the difference between mortgage underwriting standards for all debt and mortgage underwriting standards for mortgage debt. In addition to arbitrarily overlooking similar approaches that justified different caps on the debt service to income ratio, the regulations derivation of the student loan cap from mortgage underwriting standards assumes that mortgage lenders know more about affordable student loan debt than student loan experts. It also assumes that student loan debt is affordable only if the borrower is able to afford to buy a home instead of renting an apartment. 5 4 Federal Register 79(211): , October 31, See specifically the discussion that begins on page /pdf/ pdf 5 The Administrative Procedure Act requires federal agencies to provide a reasoned basis for justifying regulations, but there is no requirement that the reasoned basis involve good reasoning. 5

7 Rule of Thumb: Total Debt Less than Annual Income The rule of thumb thatt total student loan debt at graduation should be less than the expected annual starting salary corresponds to a percentage of gross monthly income within the range of 10% to 15% %, as shown by this table. This table assumes a 10 year repayment term. Accordingly, the rule of thumb is consistent with the distinction between affordable and excessive student loan debt. Interest Rate 1.0% 2.0% 3.0% 3.4% 4.0% 4.29% Percentagee of Gross Income 10..0% 10..5% 11..0% 11..6% 11..8% 12..1% 12..3% Interest Rate 5.0% 6.0% 6.8% 7.0% 8.0% 8.5% 9.0% Percentage of Gross Income 12.7% 13.3% 13.8% 13.9% 14.6% 14.9% 15.2% Percentage of College Graduates with Excessive Debt Using the 10% debt service to income ratio as a threshold on affordable vs. excessive debt, it becomes possible to calculate the percentagee of college students who graduate with excessive student loan debt. This chart shows how the percentage of Bachelor s degree recipients who graduated with excessivee student loan debt has changed over the last four decades. Excessive student loan debt is based on the 10% cap on the debt service to income ratio, income the year after graduation and a 10 year repayment term. Data for , and are based on the Baccalaureate and Beyond (B&B) longitudinal studies. Data for , and are based on a similar series of studies, the Survey of Recent College Graduates (RCG). This chart shows an increasing trend in the percent of Bachelor s degree recipients who are graduatingg with excessive student loan debt. 16.0% 14.0% 12.0% 1 8.0% 6.0% 4.0% 2.0% Percent of Bachelor's Degree Recipients who Graduate with Excessive Debt 14.4% 11.9% 9.8% 8.3% 6.7% 6. 5%

8 This chart uses the same data to calculate the percentage of Bachelor s degree recipients with excessive student loan debt as a percentage of those graduating with student loan debt, not all Bachelor s degree recipients. When those who graduate with no debt are omitted, slightly more than a quarter of Bachelor s degree recipients who borrowed for their education are graduating with excessive student loan debt. 35.0% 3 Percent of Bachelor's Degreee Recipients with Student Loans who Graduate with Excessive Debt 28.9% 27.5% 27.2% 25.0% % % 14.3% 1 5.0% This demonstrates that a relatively constant percentage of students who borrow are graduating with excessive debt. It suggests that the recent growth in the percentage of Bachelor s degree recipients who are graduating with excessive debt is due to growth in the percentage of students who must borrow to pay for college, due to a shift in the burden of paying for college from the federal and state governments to families. Overall, an average of 12.6% of monthly income is used to repay student loans the year after graduation for Bachelor s degree recipients who graduated with student loan debt, based on BB12 data. The average decreasess to 8.9% when students who graduated with no debt are included. Women are more likely to graduate with excessive debt than men (29.1% to 24.3%). They also have a higher average debt service to income ratio (13.2% to 11.6% %), mostly due to women earning lower income than men after graduation, even when employed in the same occupations. 6 Caucasian students are more likely to graduate with excessive debt (3) than Black or Africana greater increase in income for minority students who obtain college degrees, even though the average income is lower than for Caucasian students. It could also be due to differences in the balance between student and parent education debt. American students (14.6%) or Hispanic or Latino students (21.2%). This may be due to 6 Catherinee Hill and Christianne Corbett, Graduating to a Pay Gap: The Earnings of Women and Men One Year after College Graduation, AAUW, /graduating to a pay gap/ 7

9 Students majoring in theology (64.7%), law and legal studies (43.1%), communications (36.2%), agriculture (34.1%), education (33.9%), humanities (33.5%) and design (33.1%) are more likely to graduate with excessive debt, presumably due to the lower income in these fields of study. Students majoring in engineering (16.3%) and computer science (23.8%) are less likely to graduate with excessive debt, presumably due to the higher income in these fields of study. Students who borrowed private student loans are more likely to graduate with excessive student loan debt (36.4% vs. 22.8%). This may be because it is more difficult for dependent students to borrow excessively with federal student loans alone, given the low annual and cumulative loan limits on federal student loans. A college s annual cost of attendance correlates with the percentage of students graduating with excessive student loan debt, as shown in this table based on BB12 data. College costs are a key driver of debt at graduation, so higher cost colleges are more likely to have more students graduating with excessive student loan debt Annual Cost of Attendance Percent Graduating with Excessive Debt Less than $10, % $10,000 to $19, % $20,000 to $29, % $30,000 to $39, % $40,000 or more 34.6% The college affordability index 7 correlates with excessive student loan debt. Students for whom the college affordability index is 75% or more are more likely to graduate with excessive debt than students for whom the college affordability index is less than 25% (32.7% vs. 24.8%). Dependent students (as defined for federal student aid purposes) are more likely to graduate with excessive debt than independent students (30.2% vs. 23.2%). This is largely because students who are age 30 or older are much less likely to graduate with excessive student loan debt (16.4%), slightly more than half the rate for younger students. College graduates who work for the military (22.3%) or government (22.9%) are less likely to have excessive student loan debt than graduates who work for a for profit company (27.6%), a non profit organization (31.2%) or who are self employed (36.6%). Students who work in science, technology, engineering and mathematics (STEM) occupations are much less likely to graduate with excessive debt (14.8%) than students who work in non STEM occupations (28.2%). 7 The college affordability index is the ratio of the net price to total family income. Colleges that are more affordable for a student have a lower college affordability index. The net price is the difference between the annual cost of attendance and gift aid (grants, scholarships and other money that does not need to be earned or repaid). 8

10 This chart shows that high income Bachelor s degree recipients are less likely to have excessive student loan debt than low income Bachelor s degree recipients, based on BB12 data. 45.0% % % % 1 5.0% Percent with Excessive Debt by Annualized Salary Percentile, % 36.7% 27.9% 19.3% First Quintile Second Quintile Third Quintile Fourth Quintile (Less than 20%) (20% to 39%) (40% to 59% %) (60% to 79%) 9.7% Fifth Quintile (80% or more) This chart shows that Bachelor s degree recipients with higher student loan balances are more likely to have excessive studentt loan debt than Bachelor s degree recipients with lower studentt loan balances, based on BB12 data. Percent with Excessive Debt by Cumulative Loan Amount through % 54.9% 61.1% % 27..9% 35.9% 38.5% 36.8% Less than $10,000 $10,000 to $20,000 to $30,0000 to $40,000 to $50,000 to $60,000 to $70,000 to $80,0000 or $ 19,999 $29,999 $39,999 $49,999 $59,999 $69,999 $79,999 more Home schooled students are more likely to graduate with excessive debt (48.3%) than students with a high school diploma (27.1%) or GED (25.9%). Students who receive private scholarships are more likely to graduate with excessive debt (31.2% vs. 26.8%), perhaps because scholarship recipients are more likely to enroll at higher cost colleges. 9

11 High school GPA, undergraduate GPA, SAT test scores, disability status, participation in study abroad, status as a transfer student, institutional selectivity, in state vs. out of state enrollment and Federal Pell Grant recipient status do not seem to have a significant impact on whether the student graduates with excessive debt or not. Consequences of Graduating with Excessive Debt Students who graduate with excessive student loan debt are more likely to have borrowed private student loans (42.8% vs. 27.3%), based on BB12 data. Dependent undergraduate students cannot graduate with excessive debt using only federal student loans. Students who graduate with excessive student loan debt are more likely to feel that their undergraduate education was not worth the financial cost as of the year after graduation (35.8% vs. 22.2%) and more likely to say that the debt influenced their employment plans (64.3% vs. 41.6%), based on BB12 data. Students who graduate with excessive debt are less likely to have a car payment of $350 or more as of four years after graduation (44.9% vs. 54.1%) and to be paying a mortgage (34.1% vs. 42.5%), based on BB12 data. But, borrowers appear to be equally likely to have a car payment. Rather, excessive debt seems to manifest itself in a lower car payment and a lower monthly rent or mortgage payment, so that the student loan payment is a greater percentage of overall household debt payments. Curiously, students who graduate from for profit colleges tend to have higher car payments and higher monthly rent or mortgage payments, despite their higher student loan debt. These are some of the other reported consequences of graduating with excessive debt, based on BB12 data: Delayed buying a home (49.8% vs. 38.1%) Delayed getting married (27.1% vs. 20.9%) Delayed having children (36.4% vs. 27.9%) Took a job instead of enrolling in further postsecondary education (43.3% vs. 33.0%) Took a job outside of field (50.8% vs. 36.4%) Work more than desired (47.8% vs. 36.4%) Worked more than one job (33.0% vs. 23.4%) Potential Compliance with Gainful Employment The average debt service to income ratio is 15.2% for private non profit colleges, 12.6% for private forprofit colleges and 11.0% for public colleges, based on BB12 data. Using the 8% debt service to income ratio threshold used in the gainful employment regulations, 4 of Bachelor s degree recipients at private non profit colleges would have excessive debt, compared with 33.8% of Bachelor s degree recipients at private for profit colleges and 3 of Bachelor s degree recipients at public colleges, based on BB12 data. This suggests that private non profit colleges would have more problems complying with the gainful employment regulations than private for profit colleges, if the gainful employment regulations were applied to Bachelor s degree recipients at private non profit colleges. Most Bachelor s degree granting institutions would have problems complying with the gainful employment regulations even if the threshold for affordable debt were set at 15%. 10

12 Correlation of Excessive Debt with Debt and Income Percent in Deferment/Forbearance by Debt Service to Incomee Ratio, 2009 Previous studies by other researchers have reported that borrowers with lower debt levels are more likely to default than borrowers with higher debt levels. The data concerning excessivee debt at graduation presented in this report is not consistent with these previous studies. This suggests that financial stress the failure to keep debt in sync with income does not explain the results reported by the previous studies. A previous study by the author of this paper demonstrates that default rates increase with increases in the debt service to income ratio, suggesting that graduating with excessive debt can be a cause of student loan default. 8 This chart shows that the debt service to income an indicator of financial stress. ratio correlates with the percentage of borrowers in a deferment or forbearance, % 16.0% 14.0% 12.0% 1 8.0% 6.0% 4.0% 2.0% 15.7% 15.0% 14.2% 12.6% 17.6% 5% or more 8% or more 10% or more 15% or more 20% or more 8 Mark Kantrowitz, Relationship of Default Rates to Debt and Income, August 17, Deferments and forbearances are temporary suspensions of the obligation to make payments on a student loan. Interest may continue to accrue during a deferment or forbearance. 11

13 This chart shows that the debt service to income ratio correlates with default rates. Percent in Default in 2012 by 2009 Debt Service to Income Ratio 3.5% 3.0% 2.5% 2.2% 2. 6% 2..5% 2.8% 3.1% 3.2% 2.0% 1.5% 1.0% 0.5% 5% or more 8% or more 10% or more 15% or more 20% or more 25% or more This chart shows that higher cumulative undergraduate debt through correlates with increased percent in default in 2012, based on BB12 data. 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Percent in Default in 2012 by Cumulative Undergraduate Debt through % 3.6% 3.5% 1. 9% 2..0% 1.1% Less than $10,000 to $20,000 to $30,,000 to $40,,000 to $50,000 to $10,,000 $19,999 $29,999 $39,999 $49,999 $74,999 12

14 This chart shows that the percentage of Bachelor s degree recipients with excessive debt increases with increasing debt, based on BB12 data Percent with Excessive Debt by Cumulative Undergraduate Debt, % 43.9% 36.8% 35..6% 66.0% % 20.5% 26.2% Less than $10,000 $10,000 to $20,000 to $30,000 to $40,000 to $50,000 to $19,999 $29,999 $39,999 $49,,999 $74,999 $75,000 to $99,999 $100,000 or more This chart shows that the percentage of Bachelor s degree recipients with excessive debt decreasess with increasing income, based on BB12 data. 45.0% Percent with Excessive Debt by Annualized Salary in % 35.0% % 25.2% % 1 5.0% Less than $25, % 1.3% $25,000 to $49,999 $50, 000 to $74,9999 $75,000 to $99,999 13

15 3 Averagee Debt Service to Income Salary in 2009 Ratio by Annualized 25.0% 23.5% % 1 5.0% 9.8% 6.3% 4.1% Less than $25,000 $25,000 to $49,999 $50, 000 to $74,9999 $75,000 to $99,999 This chart shows that Bachelor s degree recipients with higher annualized salaries have lower debt service to income ratios, based on BB12 data. This chart shows that Bachelor s degree recipients with higher cumulative undergraduate debt have higher debt service to income ratios, based on BB12 data % 3 Averagee Debt Service to Income Debt, Ratio by Cumulative Undergraduate % 35.2% 25.0% % 1 7.6% 10.3% 12.7% 14.3% 18..2% 2 5.0% Less than $10,000 $10,000 to $20,000 to $30,000 to $40,000 to $50,000 to $19,999 $29,999 $39,999 $49,,999 $74,999 $75,000 to $99,999 $100,000 or more 14

16 This chart shows that the distribution of debt is similar across income strata, so it is unlikely for borrowers with low debt to also have much lower income, thereby, yielding higher debt service toincome ratios. So, even if there is a minimum income threshold required for basic living expenses, it is unlikely to cause differences in ability to repay student loan debt for borrowers with low cumulative undergraduate debt. Distribution of Cumulative Undergraduate Debt by Annualized Salary in % % % Less than $25,000 $25,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 1 $100,000 or more 5.0% Less than $10,000 $10,000 to $19,999 $20,000 to $29,999 $30,000 to $39,999 $40,000 to $49,999 $50,000 to $59,999 Cumulative Undergraduate Debt This chart is similar, but shows the distribution of annualized salary in 2009 by cumulative undergraduate debt. It shows that low income graduates aren t any more or less likely to have lower cumulative undergraduate debt. Distribution of Annualized Salary in 2009 by Cumulative Undergraduate Debt Less than $10,000 $10,000 to $19,999 $20,000 to $29,999 $30,000 to $39,999 $40,000 to $49,999 $50,000 to $59,999 Less than $25,000 $25,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 or more Annualized Salary in 2009 Perhaps, the results found in other studies depend more on college completion than the amount of student loan debt. After all, students who drop out of college tend to have less student loan debt than 15

17 students who graduate because they are enrolled for fewer payment periods. Thus, the amount of debt may be a dependent variable and not an independent variable, influenced by college completion as a confounding factor. Recommendations It is increasingly important to understand the consequences of excessive student loan debt because of the increasing prevalence of student loan debt. This paper discusses excessive student loan debt by Bachelor s degree recipients only, due to the limitations of available data. It does not report on excessive debt by recipients of other degrees, such as Associate s degrees, Certificates and more advanced degrees. It also does not report on excessive debt owed by students who drop out of college. It does not report on other reasons why students might fail to repay their student loans, such as dissatisfaction with the quality of their education. Recommendation: The U.S. Department of Education should initiate a study of the consequences of excessive student loan debt. This study can be implemented by tracking outcomes for all degree levels and for non completers in a manner similar to that of the Baccalaureate & Beyond (B&B) longitudinal study, namely as a follow up to a subset of participants in the quadrennial National Postsecondary Student Aid Study (NPSAS). Congress should provide sufficient funding for this study to ensure that it occurs. Without funding, there is no guarantee that this study will be implemented, even if mandated by Congress. Although the 2009 follow up to the Beginning Postsecondary Students longitudinal study (BPS:04/09) may be used to calculate the percentage of college graduates with Associate s degrees and Certificates who have excessive debt, the data is not comparable with the data used in this paper from the Baccalaureate & Beyond (B&B) study for Bachelor s degree recipients. The B&B study provides income data one year after degree attainment. The BPS study provides income data income data in 2009 for cumulative degree attainment during the prior six years. Even if one restricts the degree attainment to students who received a degree in , the BPS study still involves an additional restriction to students who first enrolled in The BPS study also does not address whether graduate and professional school students are graduating with excessive student loan debt. Thus, the data in this table is at best suggestive. BPS:04/09 Cumulative Persistence and Degree Attainment as of Percent of Borrowers with Excessive Debt Percent with Excessive Debt Attained Bachelor s Degree 15.6% 24.4% Attained Associate s Degree 5.2% 8.9% Attained Certificate 2.8% 4.7% No Degree, Still Enrolled 2.4% 5.3% No Degree, Left without Return 4.5% 9.5% Colleges often refer to student loans as a form of financial aid, arguing that student loans make college more affordable. Student loans delay the repayment obligation, but do not reduce or eliminate it. But, despite widespread claims that student loans make college more affordable, few, if any, colleges track whether their students are graduating with affordable debt. Monitoring long term trends is necessary for anticipating and identifying problems when they occur. If too many students are graduating with 16

18 excessive debt, it can affect the college s reputation. It can also have an impact on charitable contributions to the college. Increasing awareness is the first step in exercising restraint. Recommendation: Each college and university should annually track the percentage of students graduating with excessive debt. The data should be disaggregated by degree level. Recommendation: Alternately, the U.S. Department of Education could track the percentage of students graduating with excessive debt for each college and university. This will require tracking of private student loans in addition to federal student loans. It will also require an approach that protects the privacy of individual student data, especially data concerning income. Perhaps, it could be implemented in a manner similar to the one used for the gainful employment regulations. Recommendation: Colleges and universities should include a discussion of excessive debt and the consequences of borrowing too much in their loan counseling programs. Students who are predicted to graduate with excessive debt based on borrowing patterns and academic major should be targeted for more aggressive loan counseling and financial literacy training. Recommendation: Financial aid award letters should be standardized to clarify distinctions between loans and grants. Increasing awareness of debt is the first step toward exercising restraint. The financial aid award letters should include an excessive debt alert for students who are predicted to graduate with excessive debt based on past borrowing patterns. 17

Student Aid Policy Analysis Debt at Graduation

Student Aid Policy Analysis Debt at Graduation Aid Policy Analysis Debt at Graduation www.edvisors.com/student aid policy/debt at graduation/ Mark Kantrowitz Senior Vice President and Publisher January 7, 2014 Edvisors Network Inc., 10000 W. Charlesn

More information

STUDENT DEBT MYTHS AND FACTS Second Edition

STUDENT DEBT MYTHS AND FACTS Second Edition STUDENT DEBT MYTHS AND FACTS Second Edition April 2014 The Issue Student loan debt is now approximately $1 trillion, and the delinquency rate for student loans has increased to 10 percent. Critics are

More information

Profile of Pell Grant Recipients Quick Reference Guide

Profile of Pell Grant Recipients Quick Reference Guide Profile of Recipients Family Income The average family adjusted gross income (AGI) for recipients is 123% of the poverty line (median 112%), compared with 395% of the poverty line for non-recipients. Adjusted

More information

Default Rates by Institution Level vs. Degree Program

Default Rates by Institution Level vs. Degree Program Student Aid Policy Analysis Default Rates by vs. Mark Kantrowitz Publisher of FinAid.org and FastWeb.com July 15, 2010 EXECUTIVE SUMMARY The US Department of Education should consider publishing cohort

More information

Undergraduate Debt Causes Pipeline Leakage from Undergraduate School to Graduate and Professional School

Undergraduate Debt Causes Pipeline Leakage from Undergraduate School to Graduate and Professional School Student Aid Policy Analysis Undergraduate Debt Causes Pipeline Leakage from Undergraduate School to Graduate and Professional School Mark Kantrowitz Publisher of Fastweb.com and FinAid.org November 22,

More information

Characteristics of College Students Who Graduate with No Debt

Characteristics of College Students Who Graduate with No Debt Student Aid Policy Analysis Characteristics of College Students Who Graduate EXECUTIVE SUMMARY Mark Kantrowitz Publisher of Fastweb.com and FinAid.org August 24, 2011 About two fifths of undergraduate

More information

The question of whether student debt levels are excessive

The question of whether student debt levels are excessive College on Credit: How Borrowers Perceive Their Education Debt By Sandy Baum and Marie O Malley Sandy Baum is professor of economics at Skidmore College in Skidmore, PA. Marie O Malley is vice president

More information

The Impact of Loan Repayment Rates on Minority Students

The Impact of Loan Repayment Rates on Minority Students Student Aid Policy Analysis The Impact of Loan Repayment Rates on Minority Students Mark Kantrowitz Publisher of Fastweb.com and FinAid.org September 27, 2010 There is a very strong correlation between

More information

Addendum to What is Gainful Employment? What is Affordable Debt?

Addendum to What is Gainful Employment? What is Affordable Debt? Student Aid Policy Analysis Addendum to What is Gainful Employment? What is Affordable Debt? Mark Kantrowitz Publisher of FinAid.org and FastWeb.com April 27, 2010 EXECUTIVE SUMMARY This addendum to the

More information

Household Debt and Credit: Student Debt

Household Debt and Credit: Student Debt Household Debt and Credit: Student Debt February 28, 2013 Donghoon Lee The views presented here are those of the author and do not necessarily reflect those of the Federal Reserve Bank of New York, or

More information

The Student Debt Review

The Student Debt Review New America Education Policy Program February 2014 Policy Brief The Student Debt Review Analyzing the State of Undergraduate Student Borrowing Ben Miller 2 The Student Debt Review About the Author Ben

More information

College graduates earn more money than workers with

College graduates earn more money than workers with The Financial Value of a Higher Education By Mark Kantrowitz Mark Kantrowitz is the founder and publisher of FinAid.org and author of FastWeb College Gold. Five years have passed since the U.S. Census

More information

Balancing Passion and Practicality:

Balancing Passion and Practicality: Balancing Passion and Practicality: The Role of Debt and Major on Students Financial Outcomes Student Financial Aid Research Network Conference June 14, 2012 Jeff Webster Assistant Vice-President, Research

More information

What is Gainful Employment? What is Affordable Debt?

What is Gainful Employment? What is Affordable Debt? Student Aid Policy Analysis What is Gainful Employment? What is Affordable Debt? Mark Kantrowitz Publisher of FinAid.org and FastWeb.com March 1, 2010; Revised March 11, 2010 1 EXECUTIVE SUMMARY The Higher

More information

Factsheet Higher Education Affordability Act

Factsheet Higher Education Affordability Act Factsheet Higher Education Affordability Act Title I General Provisions 90/10 Rule - Changes the 90/10 rule to 85/15 for proprietary institutions, requiring proprietary institutions to derive more than

More information

Community College Students and Federal Student Financial Aid: A Primer

Community College Students and Federal Student Financial Aid: A Primer Community College Students and Federal Student Financial Aid: A Primer Jolanta Juszkiewicz April 2014 American Association of Community Colleges Washington, DC PREFERRED CITATION Juszkiewicz, J. (2014,

More information

Distribution of Debt at Graduation by Amount of Debt, College Type and Degree Program

Distribution of Debt at Graduation by Amount of Debt, College Type and Degree Program Student Aid Policy Analysis Distribution of Debt at Graduation by Amount of Debt, College Type and Program Mark Kantrowitz Publisher of Fastweb.com and FinAid.org September 29, 2010 This paper explores

More information

bachelor s degree-granting institutions were located.

bachelor s degree-granting institutions were located. WEB Profile of 2007 08 2007-08 First-Time Bachelor s TABLES Degree Recipients U.S. DEPARTMENT OF EDUCATION in 2009 OCTOBER 2012 NCES 2013-150 These Web Tables provide wideranging information on the demographic

More information

Student Loans A comprehensive look at student aid and the various repayment options

Student Loans A comprehensive look at student aid and the various repayment options Student Loans A comprehensive look at student aid and the various repayment options How Much Does College Cost? According to the Bureau of Labor Statistics and the US Department of Labor, the average cost

More information

Partial Public Service Loan Forgiveness Loophole Will Yield Substantial Financial Benefits to Some Medical School Graduates

Partial Public Service Loan Forgiveness Loophole Will Yield Substantial Financial Benefits to Some Medical School Graduates Student Aid Policy Analysis Partial Public Service Loan Forgiveness Loophole Will Yield Substantial Financial Benefits to Some Medical School Graduates Mark Kantrowitz Publisher of Fastweb.com and FinAid.org

More information

Trick or Treat? U.S. Department of Education Publishes Final Gainful Employment Regulations

Trick or Treat? U.S. Department of Education Publishes Final Gainful Employment Regulations Student Aid Policy Analysis Trick or Treat? U.S. Department of Education Publishes Final Gainful Employment Regulations www.edvisors.com/ask/student aid policy/trick or treat gainful employment final rule/

More information

Leaving Money on the Table

Leaving Money on the Table Student Aid Policy Analysis Leaving Money on the Table www.edvisors.com/ask/student aid policy/leaving money on the table/ Mark Kantrowitz Senior Vice President and Publisher January 12, 2015 Edvisors

More information

Which Path? A Roadmap to a Student s Best College. National College Access Network National Conference Mary Nguyen Barry September 16, 2014

Which Path? A Roadmap to a Student s Best College. National College Access Network National Conference Mary Nguyen Barry September 16, 2014 Which Path? A Roadmap to a Student s Best College National College Access Network National Conference Mary Nguyen Barry September 16, 2014 THE EDUCATION TRUST WHO WE ARE The Education Trust works for the

More information

Student Loan Market Trends Is College Worth It. Presenter: Kelly Savoie, Director Business Development April 2016

Student Loan Market Trends Is College Worth It. Presenter: Kelly Savoie, Director Business Development April 2016 Student Loan Market Trends Is College Worth It Presenter: Kelly Savoie, Director Business Development April 2016 Agenda This presentation is an overview of trends in the industry and the value of a college

More information

College: A Necessity Priced as a Luxury

College: A Necessity Priced as a Luxury College: A Necessity Priced as a Luxury Six Facts on College and the Middle Class May 2014 A Middle Class Job Does Not Get a Middle Class Life v Today, a middle class job increasingly does not support

More information

Students will devise a savings plan for college.

Students will devise a savings plan for college. Lesson Description Students will analyze data to determine the relationship between level of educational attainment and weekly earnings and the relationship between level of educational attainment and

More information

AGENDA ITEM 12. Action requested:

AGENDA ITEM 12. Action requested: AGENDA ITEM 12. SUMMARY OF: INCREASING COLLEGE ACCESS OR JUST INCREASING DEBT? A DISCUSSION ABOUT RAISING STUDENT LOAN LIMITS AND THE IMPACT ON ILLINOIS STUDENTS Submitted for: Summary: Information The

More information

A Guide to Student Loan Consolidation

A Guide to Student Loan Consolidation A Guide to Student Loan Consolidation Introduction If you are reading this, you probably have student loan repayment fast approaching. Fortunately, you have options for repaying your student loans. One

More information

Measures of College Affordability and Student Aid in North Carolina. Analysis by Laura Greene Knapp Education Research Consultant.

Measures of College Affordability and Student Aid in North Carolina. Analysis by Laura Greene Knapp Education Research Consultant. Benchmarks: Measures of College Affordability and Student Aid in North Carolina Analysis by Laura Greene Knapp Education Research Consultant for the North Carolina State Education Assistance Authority

More information

Student Debt Being Smart about Student Loans

Student Debt Being Smart about Student Loans Insight. Education. Analysis. S e p t e m b e r 2 0 1 4 Student Debt Being Smart about Student Loans By Kevin Chambers During the 2008 crisis, total American household debt fell. The amount of money borrowed

More information

Debunking Student Loan Headlines

Debunking Student Loan Headlines Debunking Student Loan Headlines Presented by Jillian Gajtka Saturday, June 11, 2016 11:15 a.m. Student Loan Debt 2 Recent Headlines 3 Headlines crisis bubble 4 Student Loan Jeopardy What percentage of

More information

Invest in Education By Scott Niederjohn

Invest in Education By Scott Niederjohn By Scott Niederjohn Education as Human Capital Investment takes many forms. One form is the development of human capital the knowledge, skills, health, and values that individuals possess. People develop

More information

Interest-Only and Negatively Amortized Loan Repayment Plans

Interest-Only and Negatively Amortized Loan Repayment Plans Student Aid Policy Analysis Interest-Only and Negatively Amortized Loan Repayment Plans Mark Kantrowitz Publisher of Fastweb.com and FinAid.org November 2, 2010 EXECUTIVE SUMMARY This paper discusses the

More information

Financial Aid Consumer Information

Financial Aid Consumer Information Financial Aid Consumer Information In accordance with federal regulations set forth by the Higher Education Act of 1965, as amended, NCE provides this Student Disclosures Schedule as means to disseminate

More information

Repaying Student Loans

Repaying Student Loans Repaying Student Loans It is not unusual for college tuition to cost $30,000 or more a year. Some students are able to pay for it with savings or get grants or scholarships. However, many have to turn

More information

Undergraduate Degree Completion by Age 25 to 29 for Those Who Enter College 1947 to 2002

Undergraduate Degree Completion by Age 25 to 29 for Those Who Enter College 1947 to 2002 Undergraduate Degree Completion by Age 25 to 29 for Those Who Enter College 1947 to 2002 About half of those who start higher education have completed a bachelor's degree by the ages of 25 to 29 years.

More information

"Get Your Money Straight!" EOP Workshop on Financial Literacy Fall 2008

Get Your Money Straight! EOP Workshop on Financial Literacy Fall 2008 "Get Your Money Straight!" EOP Workshop on Financial Literacy Fall 2008 Financial Literacy: Financial Aid and Student Loans Credit Budgeting Financial Aid Loan Repayment: Loan repayment begins 6 months

More information

STUDENT LOANS. A Presentation by NLSP

STUDENT LOANS. A Presentation by NLSP STUDENT LOANS A Presentation by NLSP DISCLAIMER: Please note that the information contained in this presentation is only general background information about credit reporting and student loans: This presentation

More information

Reasons Why Students Do Not File the FAFSA

Reasons Why Students Do Not File the FAFSA EXECUTIVE SUMMARY Student Aid Policy Analysis Reasons Why Students Do Not File the FAFSA Mark Kantrowitz Publisher of Fastweb.com and FinAid.org January 18, 2011 This student aid policy analysis paper

More information

Checklist Analyze your client s circumstances Inventory the federal loans Inventory the private loans

Checklist Analyze your client s circumstances Inventory the federal loans Inventory the private loans 37 million Americans have student loans Comprehensive Student Loan Training Series August 2014 1 trillion dollars in outstanding student loan debt: $1,000,000,000,000 Private Student $150 billion is outstanding

More information

10/24/2011. The New Gainful Employment Rules and Strategies for Compliance. The New Gainful Employment Rules and Strategies for Compliance

10/24/2011. The New Gainful Employment Rules and Strategies for Compliance. The New Gainful Employment Rules and Strategies for Compliance Gainful Employment Final Regulations The New Gainful Employment Rules and Mark Kantrowitz Publisher of Fastweb and FinAid October 24, 2011 Rule applies at the program level, not institution Three strikes

More information

STUDENT LOAN DEBT MANAGEMENT

STUDENT LOAN DEBT MANAGEMENT STUDENT LOAN DEBT MANAGEMENT For Social Work & Public Health Professionals Looking Ahead Your investment in your education at the Brown School at Washington University is an asset which will serve you

More information

Who Graduates College with Six-Figure Student Loan Debt?

Who Graduates College with Six-Figure Student Loan Debt? Student Aid Policy Analysis Who Graduates College with Six-Figure Student Loan Debt? Mark Kantrowitz Publisher of Fastweb.com and FinAid.org August 1, 2012 News media sometimes run stories about students

More information

Graduating to a Pay Gap

Graduating to a Pay Gap Graduating to a Pay Gap The Earnings of Women and Men One Year after College Graduation Executive Summary and Recommendations Executive Summary Fifty years after the passage of the Equal Pay Act of 1963,

More information

Adjusting Default Rates According to Borrower Demographics

Adjusting Default Rates According to Borrower Demographics Student Aid Policy Analysis Adjusting Default Rates According to Borrower Demographics Mark Kantrowitz Publisher of FinAid.org and FastWeb.com July 6, 2010 EXECUTIVE SUMMARY This paper discusses a mathematical

More information

Federal Student Loan Repayment

Federal Student Loan Repayment Federal Student Loan Repayment The Road to Zero Know your financial goals. Know what you owe. Know what time it is. Know your options. Select your plan. Manage your payments. AccessGroup.org Financial

More information

The Price of a Science PhD: Variations in Student Debt Levels Across Disciplines and Race/Ethnicity

The Price of a Science PhD: Variations in Student Debt Levels Across Disciplines and Race/Ethnicity Center for Education & Innovation at American Institutes for Research Broadening Participation in Graduate Education Issue Brief May 2013 Kristina L. Zeiser Rita J. Kirshstein Courtney Tanenbaum The Price

More information

Distribution of Household Wealth in the U.S.: 2000 to 2011

Distribution of Household Wealth in the U.S.: 2000 to 2011 Distribution of Household Wealth in the U.S.: By Marina Vornovitsky, Alfred Gottschalck, and Adam Smith Household net worth, or wealth, is an important indicar of economic well-being in the United States.

More information

Teacher Education Assistance for College and Higher Education Grant (TEACH)

Teacher Education Assistance for College and Higher Education Grant (TEACH) ARLINGTON BAPTIST COLLEGE Financial Aid Eligibility Requirements General requirements: Be a United States Citizen or permanent resident. Be accepted by ABC in a degree or certification program. Students

More information

Minnesota Office of Higher Education TUDENT OANS & CONSUMER PROTECTION

Minnesota Office of Higher Education TUDENT OANS & CONSUMER PROTECTION 4 Minnesota Office of Higher Education TUDENT OANS & CONSUMER PROTECTION Student Loans and Consumer Protection in Higher Education: These are important words to know as you are going through the process

More information

EXIT COUNSELING GUIDE FOR BORROWERS OF DIRECT LOANS AND FEDERAL FAMILY EDUCATION PROGRAM LOANS

EXIT COUNSELING GUIDE FOR BORROWERS OF DIRECT LOANS AND FEDERAL FAMILY EDUCATION PROGRAM LOANS EXIT COUNSELING GUIDE FOR BORROWERS OF DIRECT LOANS AND FEDERAL FAMILY EDUCATION PROGRAM LOANS U.S. Department of Education Arne Duncan Secretary Federal Student Aid James W. Runcie Chief Operating Officer

More information

EXIT COUNSELING GUIDE FOR BORROWERS OF DIRECT LOANS AND FEDERAL FAMILY EDUCATION PROGRAM LOANS

EXIT COUNSELING GUIDE FOR BORROWERS OF DIRECT LOANS AND FEDERAL FAMILY EDUCATION PROGRAM LOANS EXIT COUNSELING GUIDE FOR BORROWERS OF DIRECT LOANS AND FEDERAL FAMILY EDUCATION PROGRAM LOANS U.S. Department of Education Arne Duncan Secretary Federal Student Aid James W. Runcie Chief Operating Officer

More information

Intermediate Counseling Module Plan for Success Script

Intermediate Counseling Module Plan for Success Script Intermediate Counseling Module Plan for Success Script Slide 1: Title slide Slide 2: Prepare for successful repayment Borrowing money to pay for your education can greatly impact your quality of life today

More information

Federal Student Loans Maintaining Access and Preventing Default

Federal Student Loans Maintaining Access and Preventing Default Federal Student Loans Maintaining Access and Preventing Default Student Loan Cohort Default Rates What is a Cohort Default Rate (CDR)? A cohort is a group of school borrowers who entered repayment on certain

More information

Page 1 of 5 http://nyti.ms/mfa3y0 ECONOMY The Hefty Yoke of Student Loan Debt FEB. 20, 2014 High & Low Finance By FLOYD NORRIS More than five years after the binge of irresponsible lending led to the credit

More information

What It s Worth: Field of Training and Economic Status in 2009

What It s Worth: Field of Training and Economic Status in 2009 What It s Worth: Field of Training and Economic Status in 2009 Household Economic Studies Issued February 2012 P70-129 INTRODUCTION The relationship between educational attainment and economic outcomes

More information

Dealing With Debt. 1992 93 Bachelor s Degree Recipients 10 Years Later. Postsecondary Education Descriptive Analysis Report

Dealing With Debt. 1992 93 Bachelor s Degree Recipients 10 Years Later. Postsecondary Education Descriptive Analysis Report Dealing With Debt 1992 93 Bachelor s Degree Recipients 10 Years Later Postsecondary Education Descriptive Analysis Report U.S. Department of Education NCES 2006-156 THIS PAGE INTENTIONALLY LEFT BLANK Dealing

More information

ETS s Addressing Achievement Gaps Symposium. Advancing Success for Black Men in College. A Statistical Profile

ETS s Addressing Achievement Gaps Symposium. Advancing Success for Black Men in College. A Statistical Profile ETS s Addressing Achievement Gaps Symposium Advancing Success for Black Men in College A Statistical Profile ETS s Addressing Achievement Gaps Symposium Advancing Success for Black Men in College Co-sponsored

More information

Direct loan Information. Federal Direct Student Loans A simple and flexible way to finance your education. Welcome!

Direct loan Information. Federal Direct Student Loans A simple and flexible way to finance your education. Welcome! Direct loan Information Federal Direct Student Loans A simple and flexible way to finance your education. Welcome! Beginning Spring Semester 2012, Ogeechee Technical College will be participating in the

More information

Navigating Funding Streams for Post-Secondary Education &Training

Navigating Funding Streams for Post-Secondary Education &Training Navigating Funding Streams for Post-Secondary Education &Training (Where to find the money your customer needs to fund his/her Career Training Experience) Funding Source Options Pay As You Go Personal

More information

Statistics on Student Loans / Debt Generation Debt: Erasing Student Loans and Debt Guy Kendall-Freas

Statistics on Student Loans / Debt Generation Debt: Erasing Student Loans and Debt Guy Kendall-Freas Statistics on Student Loans / Debt Generation Debt: Erasing Student Loans and Debt Guy Kendall-Freas NEA Member Benefits OH/KY/WV Regional Office 1217 Monterey Dr Mansfield, OH 44907 888-749-7380 Gkendall-freas@neambcom

More information

Overview of the Student Loan Market and Predictors of Student Loan Delinquencies

Overview of the Student Loan Market and Predictors of Student Loan Delinquencies Overview of the Student Loan Market and Predictors of Student Loan Delinquencies Alvaro Mezza October 2, 2014 The analysis and conclusions in this presentation are those of the author and do not necessarily

More information

Trends in Homeownership and Mortgage Debt among Older Americans Office for Older Americans

Trends in Homeownership and Mortgage Debt among Older Americans Office for Older Americans June 24, 2015 Trends in Homeownership and Mortgage Debt among Older Americans Office for Older Americans Presentation for MHA Trusted Advisors Note: This document was used in support of a live discussion.

More information

Fast Facts on Education in America UPDATED FEBRUARY 2014

Fast Facts on Education in America UPDATED FEBRUARY 2014 Fast Facts on Education in America UPDATED FEBRUARY 2014 The climate of postsecondary education in America has changed dramatically since Scholarship America s inception more than 55 years ago. Access

More information

STUDENT LOAN REPAYMENT STRATEGIES

STUDENT LOAN REPAYMENT STRATEGIES STUDENT LOAN REPAYMENT STRATEGIES FOR GRADUATE STUDENTS November 9, 2009 Updated: 11/04/2009 The information contained in this presentation is not comprehensive, is subject to constant change, and therefore

More information

Loans 101 2015-16. Maria Rebecchi Assistant Director of Financial Aid

Loans 101 2015-16. Maria Rebecchi Assistant Director of Financial Aid Loans 101 2015-16 Maria Rebecchi Assistant Director of Financial Aid Agenda Introductions A few considerations before you take out a loan Overview of student loans Types, amounts, eligibility, application,

More information

Principles of Loan Repayment

Principles of Loan Repayment Borrowing a Student Loan Prior to July 1, 2010, there were two federal student loan programs that made Stafford, PLUS, and Consolidation loans - the Federal Direct Loan Program (Direct) and The Federal

More information

Student Loan Borrowing and Repayment Trends, 2015

Student Loan Borrowing and Repayment Trends, 2015 Student Loan Borrowing and Repayment Trends, 2015 April 16, 2015 Andrew Haughwout, Donghoon Lee, Joelle Scally, Wilbert van der Klaauw The views presented here are those of the authors and do not necessarily

More information

WEB TABLES. Characteristics of Associate s Degree Attainers and Time to Associate s Degree U.S. DEPARTMENT OF EDUCATION MARCH 2012 NCES 2012-271

WEB TABLES. Characteristics of Associate s Degree Attainers and Time to Associate s Degree U.S. DEPARTMENT OF EDUCATION MARCH 2012 NCES 2012-271 WEB TABLES U.S. DEPARTMENT OF EDUCATION MARCH 2012 NCES 2012-271 Characteristics of Associate s Degree Attainers and Time to Associate s Degree The number of associate s degrees conferred by U.S. postsecondary

More information

Teacher Education Assistance for College and Higher Education Grant (TEACH Grant)

Teacher Education Assistance for College and Higher Education Grant (TEACH Grant) Teacher Education Assistance for College and Higher Education Grant (TEACH Grant) Exit Counseling Guide December 18, 2008 1 Overview What is the TEACH Grant Program? The U.S. Department of Education s

More information

The following types of Financial Aid are available:

The following types of Financial Aid are available: STUDENT FINANCIAL AID ELIGIBILITY To be eligible to receive Federal Student Financial Aid (Title IV), an applicant must possess a high school diploma or its equivalent (GED), or pass an approved Ability-

More information

FEDERAL STUDENT LOANS. Education Could Do More to Help Ensure Borrowers Are Aware of Repayment and Forgiveness Options

FEDERAL STUDENT LOANS. Education Could Do More to Help Ensure Borrowers Are Aware of Repayment and Forgiveness Options United States Government Accountability Office Report to Congressional Requesters August 2015 FEDERAL STUDENT LOANS Education Could Do More to Help Ensure Borrowers Are Aware of Repayment and Forgiveness

More information

Money Management 101. Financial Literacy Committee Victoria College

Money Management 101. Financial Literacy Committee Victoria College Money Management 101 Financial Literacy Committee Victoria College 1) What counts the most in your a) Length of History FICO credit score? b) Capacity Used c) New Credit d) On-Time Payments e) Types of

More information

Dr. Lindsey Malcom-Piqueux. AIR Symposium on Using Research to Inform Policies and Practices in STEM Education. September 27, 2013

Dr. Lindsey Malcom-Piqueux. AIR Symposium on Using Research to Inform Policies and Practices in STEM Education. September 27, 2013 Dr. Lindsey Malcom-Piqueux AIR Symposium on Using Research to Inform Policies and Practices in STEM Education September 27, 2013 How do financial aid policies at the institutional, state, and federal levels

More information

The Role of Student Loans in Financial Aid. Loans 101: Understanding the Basics. Objectives. The role of loans in financial aid

The Role of Student Loans in Financial Aid. Loans 101: Understanding the Basics. Objectives. The role of loans in financial aid Loans 101: Understanding the Basics Objectives 1 2 3 4 The role of loans in financial aid Overview of the Title IV Loan Program Repayment options Counseling resources The Role of Student Loans in Financial

More information

Private Education Loans 101: Helping students compare student loan options

Private Education Loans 101: Helping students compare student loan options Private Education Loans 101: Helping students compare student loan options Presented by: Erin Gjerde and Denise Burmeister Account Executives Wells Fargo Education Financial Services 2013 SASFAA Conference

More information

OBJECTIVES. The BIG Idea. How can I find scholarships that suit my situation, and how do I keep track of my efforts? Searching for Scholarships II

OBJECTIVES. The BIG Idea. How can I find scholarships that suit my situation, and how do I keep track of my efforts? Searching for Scholarships II 3 Financial Aid Searching for Scholarships II The BIG Idea How can I find scholarships that suit my situation, and how do I keep track of my efforts? AGENDA Approx. 45 minutes I. Warm Up (5 minutes) II.

More information

One Hundred Tenth Congress of the United States of America

One Hundred Tenth Congress of the United States of America H. R. 5715 One Hundred Tenth Congress of the United States of America AT THE SECOND SESSION Begun held at the City of Washington on Thursday, the third day of January, two thous eight An Act To ensure

More information

Student Loans Know Your Options

Student Loans Know Your Options Student Loans Know Your Options Sam Hewitt Director, Political & Grassroots Advocacy, GRPP Samuel J. Hewitt Sam Hewitt is the director of political and grassroots advocacy at the American Speech-Language-Hearing

More information

a topic for a future issue brief, please Minnesota is heading into challenging territory. In the decades

a topic for a future issue brief, please Minnesota is heading into challenging territory. In the decades RESEARCH BRIEF September 2011 Minnesota Educational Needs and Higher Education Finance Policy This is one in a series of research-based briefs prepared by the Minnesota Private College Council for members

More information

Student Loan Information Provision and Academic Choices

Student Loan Information Provision and Academic Choices Student Loan Information Provision and Academic Choices By Maximilian Schmeiser, Christiana Stoddard, and Carly Urban As the cost of pursuing post-secondary education in the United States has continued

More information

Assessing the impact. U.S. student loan debt reaches $1 trillion 12 SPRING 2013 TEN

Assessing the impact. U.S. student loan debt reaches $1 trillion 12 SPRING 2013 TEN Assessing the impact U.S. student loan debt reaches $1 trillion Photo by Gary Barber 12 SPRING 2013 TEN ost students don t think about the money they borrow for college until they get the bill. And the

More information

Educational Attainment of Veterans: 2000 to 2009

Educational Attainment of Veterans: 2000 to 2009 Educational Attainment of Veterans: to 9 January 11 NCVAS National Center for Veterans Analysis and Statistics Data Source and Methods Data for this analysis come from years of the Current Population Survey

More information

Trends in Graduate Education and Education Financing

Trends in Graduate Education and Education Financing Trends in Graduate Education and Education Financing Tim Fitzgibbon Vice President, Debt Management Services National Council of Higher Education Resources Harvard Graduate School of Education February

More information

Your Financial Aid Journey. Investing in Your Future 5 Steps to Prepare for College College Financing Options Financial Aid Terms

Your Financial Aid Journey. Investing in Your Future 5 Steps to Prepare for College College Financing Options Financial Aid Terms Your Financial Aid Journey Investing in Your Future 5 Steps to Prepare for College College Financing Options Financial Aid Terms Investing in your future Higher earnings College graduates earn more money

More information

fyi Federal loans: The smart way to borrow

fyi Federal loans: The smart way to borrow Federal loans: The smart way to borrow If you don t receive enough free money to pay for college and you aren t able to cover your costs with savings or other resources, consider federal student loans.

More information

College Loan Debt: Is It Worth It?

College Loan Debt: Is It Worth It? College Loan Debt: Is It Worth It? Lesson Overview In this lesson, students compare the benefits of a college education (which is primarily increased earning capacity) with the costs of borrowing to pay

More information

During recession, education debt increased while other credit markets dropped

During recession, education debt increased while other credit markets dropped West Virginia How West Virginia Will Be Affected if Stafford Loan Interest Rates Double May 2012 More than 7 million students and their families rely on federally subsidized Stafford loans to help pay

More information

Research Report No. 06-2

Research Report No. 06-2 Research Report No. 06-2 Washington State Board for Community and Technical Colleges Building Pathways to Success for Low-Skill Adult Students: Lessons for Community College Policy and Practice from a

More information

The Impact of Loan Repayment Rates on Pell Grant Recipients

The Impact of Loan Repayment Rates on Pell Grant Recipients Student Aid Policy Analysis The Impact of Loan Repayment Rates on Pell Grant Recipients Mark Kantrowitz Publisher of Fastweb.com and FinAid.org September 1, 2010 Affordable debt restrictions, such as those

More information

Federal Student Aid TEACH Fact Sheet

Federal Student Aid TEACH Fact Sheet Federal Student Aid TEACH Fact Sheet www.federalstudentaid.ed.gov TEACH GRANT PROGRAM Through the College Cost Reduction and Access Act of 2007, Congress created the Teacher Education Assistance for College

More information

Understanding the Student Loan Explosion. Implications for students and their families. Sponsored by:

Understanding the Student Loan Explosion. Implications for students and their families. Sponsored by: Understanding the Student Loan Explosion Implications for students and their families Sponsored by: Understanding the Student Loan Explosion: Implications for students and their families True wisdom is

More information

Disability Insurance Statistics

Disability Insurance Statistics Individual Disability Insurance Disability Insurance Statistics Individual Disability Insurance from Principal Life Insurance Company helps clients protect their most valuable asset - their ability to

More information

Federal Student Loan Debt: 1993 to 2004

Federal Student Loan Debt: 1993 to 2004 Issue Brief June 2005 Federal Student Loan Debt: 1993 to 2004 University officials, lenders, and policy makers typically monitor annual federal student loan volume (the number of loans made and the total

More information

The Burden of Borrowing

The Burden of Borrowing The Burden of Borrowing A report on the rising rates of student loan debt The Burden of Borrowing: A Report on the Rising Rates of Student Loan Debt March 2002 By Tracey King and Ellynne Bannon Special

More information

Response to CFPB request for information regarding an initiative to promote student loan affordability (Docket No. CFPB-2013-0004)

Response to CFPB request for information regarding an initiative to promote student loan affordability (Docket No. CFPB-2013-0004) Response to CFPB request for information regarding an initiative to promote student loan affordability (Docket No. CFPB-2013-0004) By Mark Kantrowitz, publisher of Fastweb.com and FinAid.org Thawing the

More information

Alumni Award Recipients are students who are children or grandchildren of Ottawa University graduates.

Alumni Award Recipients are students who are children or grandchildren of Ottawa University graduates. Financial Assistance at The College The College has a program of scholarships and grants. This is gift aid that does not have to be repaid. Institutional aid is awarded in a nondiscriminatory fashion,

More information

The LearnVest Personal Finance Review

The LearnVest Personal Finance Review The LearnVest Personal Finance Review Financial Goals of 2015 The LearnVest Personal Finance Review examines and explores how people nationwide approach their money. 1 LearnVest is a program for your money.

More information

ABHISHEK AGARWAL. Financial Fitness Report

ABHISHEK AGARWAL. Financial Fitness Report ABHISHEK AGARWAL Financial Fitness Report The Big Picture Over 93 banks and lending institutions in India submit your credit payment performance data to Credit Information Companies commonly known as Credit

More information

Selection of Student Loans and College Performance

Selection of Student Loans and College Performance Selection of and College Performance Maximilian Schmeiser 1 Christiana Stoddard 2 Carly Urban 2 1 Federal Reserve Board 2 Department of Agricultural Economics and Economics Montana State University Cherry

More information